Fixed income commentary
Physical gilts have generally offered a yield pick-up over equivalent swap-based exposure. Yet this premium has declined over the past two years as pension funds have continued to invest heavily in gilts to match liabilities. Let's consider how much this premium might have to fall for investors to swap bonds for swaps.
The revised Trans-Pacific Partnership (TPP) agreement was finally signed in March - over a year after President Trump removed the United States as a signatory. We take a quick look at how much emerging markets depend on the US as a trading partner.
The rise in yields has accelerated, equity market volatility has spiked, and the bond vigilantes are stirring. Should we be worried?